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BlackBerry cries for help to accelerate BES 10 deployments

James Furbush

As BlackBerry looks for ways to breathe new life into its mobile platforms, its customers remain supportive -- for now.

BlackBerry's Board of Directors has formed a special committee to explore ways to accelerate BlackBerry 10 deployment. It will consider a sale, a joint venture, a strategic partnership, going private or any other "possible transactions," the company said in a statement this week.

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It is still an integral part of mobility for us.

Scotty Hartman,
senior technical analyst

The call for help is very similar to the one released by BlackBerry in June of 2012 where it underwent a "strategic review" of its business possibilities.

"It's like someone put their house on the market, couldn't sell it, and are signaling there is a price reduction," said Bob Egan, founder of the Sepharim Group, an enterprise mobile consultancy based in Yarmouth, Mass. "This is an admission of defeat by them as much as anything else."

Egan has told his BlackBerry clients to hold off on going live with BlackBerry Enterprise Server 10 (BES 10) pilots until the dust has settled.

While BlackBerry's status is reason for concern, customers with existing investments in the company's technology won't abandon ship yet, especially since the company continues to offer them a trusted platform.

"Don't get me wrong, Android and Apple are OK, but BlackBerry is still tried and true when it comes to security," said Melanie Seekins, a mobile architect for a global financial services company that is in the midst of a BES 10 pilot and is evaluating newer devices.

BlackBerry's attempts to partner or be sold will have little effect on the financial company's mobile strategy unless BlackBerry "did something crazy" as a result, Seekins said.

"Most organizations that still have Blackberry don't want to take a chance in losing security of their data on a company-owned asset," she added.

Other loyal customers agree that BlackBerry is still the benchmark for mobile security and has made great strides to redefine its direction recently after years of ignoring the impact of Apple Inc.'s iPhone and Google Inc.'s Android devices.

But, many are evaluating other mobile device options -- just in case.

"It is still an integral part of mobility for us," said Scotty Hartman, a senior technical analyst for messaging and mobile at a global human resources consulting firm, and who is investigating whether BlackBerry should remain part of the company's mobile strategy. "We're attempting to introduce iOS and Android devices into the mix, but that hasn't been met with the same success we've traditionally had with BlackBerry."

One issue Hartman worries about is that BlackBerry seems to release product versions for BES 10 and BB 10 devices that are not feature-complete in an effort to play catch-up.

"The initial releases are sloppy but the updates have been great," Hartman said. "It feels like they are succumbing to the pressure to release products ahead of functionality instead of just releasing top-notch products."

Predicting BlackBerry's uncertain future

Reading between the lines, some industry watchers wonder if BlackBerry's latest request for a suitor is a tactic to put pressure on interested parties to get a deal done.

The statement by BlackBerry CEO Thorsten Heins on Monday checked off all the reasons a company would want to acquire them, Egan said. Heins also said BlackBerry would continue its "strategy of reducing cost, driving efficiency and accelerating the deployment of BES 10 -- as well as driving adoption of BlackBerry 10 smartphones -- launching the multi-platform BBM social messaging service and pursuing mobile computing opportunities."

BlackBerry's market cap is $5.5 billion. It has a huge portfolio of mobile security patents – although those patents haven't been tested under the fire of litigation, Egan noted -- and at the end of last quarter it had $3.1 billion cash on hand.

"They aren't going away anytime soon because of that cash," said Jack Gold, founder of J. Gold Associates, an enterprise mobility consultancy based in Northborough, Mass. "It's not like the doors are going to shut tomorrow and they will go away.

"But it's good to have a contingency plan if you're in IT," he added.

The best survival mechanism for the company that industry watchers seem to all agree upon is taking the company private and away from the short-term pressures to perform better in public stock markets.

"None of the potential courses are going to be easy aside from the ideal, which would be them selling 50 million devices next quarter," Gold said.

The news of BlackBerry's potential sale comes on the heels of BlackBerry laying off employees from its research and development group in late July.


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